Gold clings to $1,700 perch as 41mn Americans unemployed

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LONDON: Gold’s mission to stay above $1,700 per ounce was helped on Thursday by another rise in weekly unemployment numbers issued by the U.S. government, which said a total of more 41 million Americans had become jobless now because of the Covid-19.
Some 2.1 million people filed for first-time unemployment insurance last week, the Labor Department said, adding to the 39 million rendered jobless in nine previous weeks after the coronavirus pandemic virtually crippled the U.S. economy.
While all the 50 U.S. states had reopened most of their economy over the past couple of weeks, fear of a second wave of infections is still inhibiting people to work and conduct economic activities like before, hampering recovery. Thus non-essential businesses have continued to lose customers and employees.
“The jobs data is still disheartening,” Ed Moya, analyst at New York’s OANDA said, predicting gold to continue aiming for $1,800 pricing, an attempt frustrated thus far by market volatility.
U.S. gold futures for June settled up $2.60, or 0.2%, at $1,713.30 per ounce on New York’s Comex.
Spot gold, which tracks real-time trades in bullion, was up $7.50, or 0.4%, at $1,716.68 by 3:23 PM ET (19:23 GMT).
Thursday’s action in gold was also supported by simmering U.S.-China tensions. U.S. Secretary of State Mike Pompeo has said Washington could no longer certify Hong Kong’s autonomy from China because of a security legislation on the territory passed by Beijing’s National People’s Congress on Thursday.
The House of Representatives, controlled by Democrats opposed to Trump, also passed on Wednesday legislation condemning China for the detention and torture of Uighur Muslims in the country’s western region of Xinjiang. The legislation passed by a vote of 413-1 after passing overwhelmingly in the Senate earlier this month and will now head to Trump, who has not said whether he intends to sign it into law.
Moya said he expected the U.S.-Hong Kong-China situation to eventually weigh on financial markets, though “for now the impact is limited”.
In other market news on Thursday, Reuters reported that gold trading banks were preparing to significantly reduce their positions on the Comex exchange.
Some bullion banks are no longer willing to hold large positions on the New York-based exchange, the biggest gold futures market, after the coronavirus snarled the supply of gold bars, the report said. The virus outbreak sent Comex prices vaulting above London rates in March, raising costs for thousands of investors.